With many overseas countries lifting their travel bans and allowing their citizens to visit South Africa once more, local casino and hospitality groups are experiencing an rise in share prices. Companies such as Sun International and Tsogo Sun saw their stock surge to 52-week highs on the Johannesburg Stock Exchange at the start of this week with the news.
President Cyril Ramaphosa moved South Africa down to its lowest pandemic restriction of Level 1 after the number of infections plummeted. This new level greatly helps casino and hospitality groups as they are now allowed to sell alcohol on the weekends, and their facilities such as casino floors and restaurants can operate for longer hours.
Tsogo Sun Hotels saw share prices rise 12% to R3.58. The company’s gaming arm was up 5.5% to R11.29 a share. Sun International reported a similar rise of 11%, with shares trading at R23, while City Lodge saw a massive surge during the morning hours at 17% before leveling off at 12.6%.
ITsogo Sun Hotels saw share prices rise 12% to R3.58. The company’s gaming arm was up 5.5% to R11.29 a share. Sun International reported a similar rise of 11%, with shares trading at R23, while City Lodge saw a massive surge during the morning hours at 17% before leveling off at 12.6%.
Up until now, Britain has banned travel to and from South Africa, citing concerns about vaccination campaigns and the spread of the Beta variant. As such, South African is still on the country’s Red List, along with Brazil, Mexico, Indonesia and around 50 others. However, there is growing hope that South African will be among those countries removed from the Red List very soon, meaning that South Africa’s biggest source of tourism from the Northern Hemisphere will start up once more. South Africa’s tourism market is anxiously waiting for the country to be removed from the Red List, since it has already lost over R6 billion in business this year alone. David Frost, the chief executive officer of the Southern Africa Tourism Services Association said:
“It has been a long time coming…. While we are grateful and optimistic that travel will open up between the two countries in both directions, we are also at a stage where we’ve been quite battered and bruised by this.”
“It’s useful that it has been announced now, although we would have loved it earlier. But we are confident that we will be able to extract some value out of the high season that is left. In terms of travel going forward, we have got to give prospective travelerssecurity and confidence,” he said.
The CEO of the Tourism Business Council of South Africa, Tshifhiwa Thivhengwa said that the increase in share prices indicated that the tourism sector may be recovering. “The Northern Hemisphere is going into winter and people are looking for sunny destinations, so SA stands a chance to benefit and rescue our summer season if the UK removes us from the red list soon. While this is the biggest short-term obstacle, in the long term it is how to make sure SA as destination is seen as attractive so we can get more visitors. We are up for that challenge of stimulating demand,” said Tshivhengwa.